Quantitative easing fails to unblock banking system
Mortgage and business lending slump in May despite Bank’s £125bn injection
Britain’s banking system remains largely frozen, according to figures released today. They showed that mortgage lending has slumped to a record low and business lending has also dropped.
Economists said the figures showed the Bank of England’s £125bn “quantitative easing” scheme was not yet delivering any real boost to the economy.
The Bank’s own figures showed that net mortgage lending fell to just £324m in May, the weakest figure since the current series of data began in 1993. And new mortgage approvals – seen as a reliable guide to where house prices may be heading in the coming months – remained steady at about 43,000 in May, breaking the rising trend of recent months. The figures are at only about half the average level of the past 15 years.
The Bank also said that lending to companies fell by £300m in May, following another drop in April.
Read more at www.guardian.co.uk
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